Daily ETF Roundup: UNG Soars, VXX Slumps

by on June 11, 2010 | ETFs Mentioned:

After slumping for much of the day on weak retail sales, equity markets surged in the final half hour of trading to finish the week in positive territory. The Dow and the S&P 500 both jumped higher by 0.4% while the Nasdaq surged higher by more than 1.1%. In commodity markets, oil slid to around $74.20/bbl. and gold regained some of its lost ground to finish the day up by close to $7. This sharp gain at the end of Friday trading ensured that the Dow would experience its first winning week in a month and came on the back of higher consumer sentiment which more than offset the 1.2% drop in retail sales in May.

The ETFdb 60 Index added 4.78 points, or 0.5%, although trading volume came in at its lightest level of the week. Winners outnumbered losers by more than seven-to-one, among the most lopsided days of the year.

The biggest loser in the ETFdb 60 was the iPath S&P 500 VIX Short-Term Futures ETN (VXX), which slumped by 2.4% in Friday trading. This sharp decline in the ‘fear index’ came after investment sentiment followed consumer sentiment higher and the S&P 500 gained roughly 10 points in the final half hour of trading. Although VXX has managed to trend higher in the past few weeks, posting a gain of 16.7% over the past month, a streak of losses leaves the the fund on downward slide that has seen it lose about 15% thus far in 2010 (see more charts of VXX here).

One of the biggest gainers in the ETFdb 60 was the United States Natural Gas Fund (UNG), which surged higher by 2.3% to finish this week’s trading. This came after reports of warmer-than-normal temperatures in much of the Central and Eastern United States for the rest of June. “With the exception of the northern Plains, warmer than normal temperatures are forecast over most of the country,” from June 17 to June 21, WSI meteorologists wrote in a note to clients. Prices were also bolstered by reports out of the NOAA which called for an 85% chance of an above-normal hurricane season, a prediction that has helped to send  UNG which is up 9% over the past two weeks, soaring again today (see more fundamentals of UNG here).

Disclosure: No positions at time of writing.